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Home My WebLink About2008.1218.TCRAM.Minutes TOWN OF FOUNTAIN HILLS MINUTES OF THE ADMINISTRATIVE AND REGULAR SESSIONS (lbw OF THE FOUNTAIN HILLS TOWN COUNCIL DECEMBER 18,2008 ADMINISTRATIVE SESSION • CALL TO ORDER—Mayor Schlum called the Administrative Session to order at 5:30 p.m. • ROLL CALL — Present for roll call were the following members of the Fountain Hills Town Council: Mayor Schlum, Councilmember Contino, Vice Mayor Leger, Councilmember McMahan, Councilmember Hansen, Councilmember Archambault and Councilmember Dickey (arrived at 5:32 p.m.). Finance Director Julie Ghetti, Planning & Zoning Director Richard Turner, Storm Water/Environmental Planner Raymond Rees,Town Attorney Andrew McGuire and Town Clerk Bev Bender were also present. AGENDA ITEM#1-UPDATE BY THE DIRECTOR OF PLANNING AND ZONING ON ACTIVITIES AND PROJECTS: GENERAL PLAN AND TRASH/RECYCLING UPDATE. Director of Planning and Zoning Richard Turner addressed the Council relative to this agenda item and provided an overview of the update to the General Plan. He noted that efforts to update the plan had been ongoing, a Committee of the Planning Commission had been appointed to study this issue, and the members had been meeting on a regular basis. He said that five members of the Planning Commission serve on the Committee and meetings were usually held at the Community Center and were scheduled to take place prior to each of the Planning Commission's meetings. He stated that the meetings typically run an hour to an hour and a half but the next meeting, on January 8th, was slated to last two hours. He reported that three meetings had taken place to date and the overall theme of the project was to bring the General Plan current with regard to factual information and introduce other changes that reflect the Town's response to changes and conditions since the Plan was approved in 2002. Mr. Turner advised that the planning firm retained by the Town had been given general direction on how to proceed and they had prepared drafts, which were submitted to and reviewed by various members of staff. The drafts were then revised based on input from staff and provided to the Committee in advance of their next meeting so that the members then had an opportunity to review them. He said that to date the Committee had reviewed the Existing Conditions Section, both text and exhibits, and referred to a notebook used by each member of the group. He added that there was an emphasis on finding new opportunities for commercial development in Town with extensive discussion regarding the area around Saguaro and Shea Boulevards. He said that one of the challenges in moving forward was the Ellman Property and said that staff would like to have the approved land use and zoning reflected in the update; however, the matter was still in the Court system. Once staff had that information they would include it in the Plan and go out for a public review in advance of the formal public hearings that would be conducted by the Planning Commission and the Council. He noted that the planning firm that was assisting the Town with this project had changed the Town's Project Manager and Mr. Mark Reddy was now serving in that capacity. He commented on the fact that Mr. Reddy had worked with the Town on the State Trust Land annexation and staff was excited about the prospect of working with him again. He reported that the name of the firm the Town contracted with was Tempe based LVA Urban Design Studios. Vice Mayor Leger asked if they completed the Plan before the Ellman property matter had been settled in Court whether they could incorporate it later on into the Plan once the case had been settled. Loy Mr. Turner stated that a decision needed to be made and staff continued to monitor it. He added that if it looked as though the case would go on for a long period of time, staff was just going to have to complete the update z:\council packets\2009\r1-15-09\12-18-08 minutes.docx Page 1 of 22 4 based on the facts as they currently stood. He said that once the case was settled,the resulting information could be incorporated into the Plan. Councilmember Archambault asked whether voter approval was needed for the update and Mr. Turner replied that it would depend on the extent of the changes to the Plan. He said staff would like to try and avoid that if possible because of the expense to the Town. He added that the more substantial the changes, the more likelihood that there would need to be an election. He confirmed that the Town was required to review its General Plan every ten years. He said that the one they were currently doing was a "mid-term adjustment" and they were six years into it. Mayor Schlum thanked Mr.Turner for his presentation. Storm Water/Environmental Planner Raymond Rees addressed the Council and provided a brief update on trash/recycling. He advised that in early 2007, staff had created an Environmental Steering Committee to support the goals set by the Council during their Retreat earlier that year. He discussed the composition of the Steering Committee and said that during the meetings held in 2007, the Committee had identified 42 environmental issues of interest. In February 2008, Council held a Work Study Session regarding the environmental policies research and held a discussion on priorities. In May 2008, the Council adopted Resolution 2008-18, which established the Town's Environmental Policies. He reported that they had identified the number one priority as being recycling. Over the past few months the Committee had been discussing the implementation of a possible mandated curbside recycling program for single-family residences within the Town. The Team created a goal for the project and decided to include curbside trash hauling in that goal. They were focusing on ideas, activities and possible remedies that would reduce the number of unsightly cans on the streets, mitigate wear and tear on the Town's streets, limit noise,reduce pollution and reduce fuel consumption. Mr. Rees informed the Council that staff contacted several other municipalities that were going through the same process as the Town in an effort to learn about their experiences, including potential roadblocks. He added that they also formed a subcommittee that had met with the trash haulers and recycling service providers at Town Hall in an effort to gain information by asking a series of questions, some of which focused on how they could help support whatever goals were set by the Committee members. He noted that the subcommittee reported back to the Environmental Steering Committee and they had considered all of the available information. They decided that a Work Study Session was needed in order to share more information with the Council and a possible date for that Session was January 20 2009. He said that some of the items that they would discuss at that meeting included whether the Town should require curb side recycling for all single-family residences in Town or possibly consider utilizing one single hauler for single-family residences. Mr. Rees thanked the Council for the opportunity to address them and indicated his willingness to respond to any questions. Mayor Schlum thanked Mr.Reese for the update. The Mayor said that this group had done an excellent job and the community had shown great interest in this important area. Discussion ensued relative to the overwhelming positive response the Town had received from citizens; the Council's concurrence that a Work Study Session was appropriate to share information and provide direction; the Town's efforts to encourage citizens to continue to recycle; the various volunteers who came every Monday between 9:00 a.m. and Noon and help monitor the contents of the bins and help people who were having problems getting their items into the bins; the fact that boxes took up a lot of space and the importance of breaking them down to conserve space and Heather's great contributions to the overall program. Mayor Schlum asked whether staff would provide different options for consideration relative to trash hauling soi) during the upcoming Work Study Session (franchises, etc.). z:\council packets\2009\r1-15-09\12-18-08 minutes.docx Page 2 of 22 Mr. Rees said that staff could open that up to all options and share all of the options that had been gathered. Councilmember Archambault commented that some of the options would have to be reviewed by Town Attorney Andrew McGuire to determine whether they were viable. He added that a lot of valuable information came out of the meeting with the haulers. Mayor Schlum discussed the benefits (maintaining streets, minimizing noise, etc.) and stressed the importance of remaining competitive. He said that they had to ensure that it was a"win-win situation." He added that a lot of the HOA's were already doing it throughout the different areas. Councilmember Hansen asked whether the haulers had talked about the ability to have two trash and one recycling a week and Mr. Rees advised that a lot of the haulers do offer two trash and one recycling programs. Councilmember Hansen said that in an effort to limit days, people could get two trash bins and one recycling bin if they wanted so they could still stick to the two days. Councilmember Archambault reported that if citizens wanted another trash bin, it would only cost another$3.00 a month or some minimal fee. Councilmember Dickey commented that it was rare that they needed two trash cans. Mayor Schlum thanked staff for their efforts in this regard. Councilmember McMahan asked whether the Boy Scouts were still involved in the recycling effort and Mr. Rees said that he had been working with a representative of that organization and they were getting new locations for their bins right now. He confirmed that this was a fund raiser for them. Staff advised that additional information would be provided to the Council at the Work Study Session and a Lio final date for the meeting would be confirmed. AGENDA ITEM #2 — DISCUSSION OF AMENDING THE TOWN OF FOUNTAIN HILLS FINANCIAL POLICIES FOR THE ADDITION OF A RAINY DAY FUND. Finance Director Julie Ghetti addressed the Council relative to this agenda item and said that in September 2007, a Revenue Enhancement Analysis by TL Hocking & Associates (referred to as the Hocking Report), was presented to the Council outlining financial stability options. One of the report recommendations that became a Council goal for FY 2008-09 was the creation of a new "Economic Stabilization Fund" or "Rainy Day Fund" (RFD) to address financial uncertainty during times of declining revenue. She reported that the Town currently had a fund balance policy (similar to a savings account) that established designated and undesignated reserves; the Town had maintained a fund balance equal to 30% of General Fund revenues plus 30 days of operating expenditures. The current balance of reserves was $6.5 million in the General Fund and an RFD would be in addition to the reserve fund. Ms. Ghetti advised that the fund balance was a key market for bond rating agencies to check on the fiscal stability of cities/towns and make sure they had an adequate amount of reserves should an emergency occur. She added that a "Rainy Day Fund" was designed to be used primarily to supplements budgets when there was an economic downturn. She added that money was set aside during better economic times so that it could be used when the economy was not so good. Ms. Ghetti stated that a few policy decisions need to be made prior to setting up a"Rainy Day Fund" including: 1) What would be the maximum amount of money that would be put aside in the"Rainy Day Fund" should the Council decide to proceed with this option. 2) How would money be put into the"Rainy Day Fund;" what would be the source of revenue. z:\council packets\2009\r1-15-09\12-18-08 minutes.docx Page 3 of 22 3) How would they replace the "Rainy Day Fund" if they had to use those funds. 4) What would be considered a legitimate, appropriate use for the"Rainy Day Funds." Ms. Ghetti discussed "Rainy Day Fund" caps and said that the Government Finance Officers' Association (GFOA) stated that governments, regardless of their size, should have no less than five to fifteen percent of regular General Fund operating revenues in a reserve fund. She reiterated that the Town's current fund balance policy was 30%. In response to a request from Mayor Schlum,Ms. Ghetti explained that the fund balance policy was adopted five years ago when the economy was doing very well and the Town had several years of surpluses so they had put those surpluses aside and created the policy (funds equal to 30% were set aside). She added that they had maintained that balance and it did not show up anywhere in the budget as available revenues; it was just set aside in a savings account and could not be used unless an emergency occurred. Ms. Ghetti discussed the Hocking report and stated that it showed that many other municipalities had significantly higher reserves than the Town. She noted that the Town's fund balance could not be used to supplement a shortfall; it was strictly savings, whereas the "Rainy Day Fund" was specifically designed to supplement shortfalls. She confirmed that the fund the Town currently had was to maintain the Town's bond rating. Ms. Ghetti said that if the Council wished to move forward and establish a "Rainy Day Fund," staff would recommend that it be 20% of the General Fund budgeted expenditures ($3.4 million) as a cap. Ms. Ghetti stated that the second issue involved "Rainy Day Fund" deposit rules, how the Town funds the "Rainy Day Fund." She said that out of all the cities that she surveyed, 56% of them funded their "Rainy Day Fund" with surplus revenues at the end of the year and 32% did an annual appropriation into the Fund. She added that if the Council wanted to move forward with this, staff would recommend that they include in the annual budget an appropriation of 1% of the General Fund to fund the"Rainy Day Fund" plus 10% of any year- end surplus until the fund reached $2 million and after that, 5% of the unencumbered cash balance until the fund reached 20% of the General Fund budgeted expenditures ($3.4 million). She reported that if the Council wanted to appropriate each year an amount of money to go into the Fund, it would be approximately $160,000 per year out of the General Fund and it would take about 12 years if there were no surplus revenues. Town Manager Rick Davis informed the Council that staff was not seeking direction today; they were simply providing information for discussion purposes. Ms. Ghetti said that the next issue involved Replenishment rules —rules that require "Rainy Day Funds," after they were used, to be replenished. She said that the rules should not compete with other programs for scarce resources during an economic downturn. Ms. Ghetti advised that staff's recommendation would be that funds be withdrawn from the Fund must be restored annually at a rate of not less than 2% of the General Fund revenue of the latest completed Fiscal Year until the Fund was restored to 20%. She added that repayments to the Fund shall be appropriated in the annual budget. Ms. Ghetti confirmed that should the Council desire, they could restore more than the recommended 2%. Vice Mayor Leger commented on the fact that currently the Town took one-time revenues (construction sales tax revenues, etc.) and puts 85% of that into capital. He asked whether adjustments could be made in that area as well. Ms. Ghetti advised that one of the recommendations was to take 10% of the surplus before transferring over to the Capital Projects Fund. Ms. Ghetti discussed the last item, legitimate use, and how the"Rainy Day Funds" would be used. She reported that out of all of the entities she surveyed, 55%use the funds to cover budget shortfalls and said that staff would recommend that any withdrawals from the Fund be by appropriation only if: 1) the total actual State Shared z:\council packets\2009\r1-15-09\12-18-08 minutes.docx Page 4 of 22 Revenues fell short by 5% or more of the total anticipated revenue for the Fiscal Year in which the appropriation was made; 2) to replace the local loss of Federal funds; 3) for any event that threatened the health, safety or Lie welfare of the people or the fiscal stability of the Town; and 4) the Legislature/Governor declared a fiscal emergency. She explained that the intent would be, to the extent possible, that revenue shortfalls be offset by reductions in expenditures before using amounts in the reserve fund. The withdrawal, she added, would require approval by a majority of five members of the Council. Ms. Ghetti said that a question for the Council to consider was what level of savings would they desire (was 30% enough or 40%?). She added that staff would bring this issue forward again in the future with recommendations. Councilmember Archambault noted that staff's recommendation was currently 20% on top of the 30% that was already in place and said that he would go at least that much and added that it might take 12 years to reach that point(a shorter period of time during good years). He said that if they did in fact reach the goal within a shorter period of time and had an opportunity to increase the amount, he would support doing so. The Mayor pointed out that they always had to keep in mind that they were reducing the amount that went towards capital. Mayor Schlum and members of the Council thanked Ms. Ghetti for the informative presentation. AGENDA ITEM#3—ADJOURNMENT Councilmember McMahan MOVED to adjourn the Administrative Session and Vice Mayor Leger SECONDED the motion, which CARRIED UNANIMOUSLY (7-0). The meeting adjourned at 6:09 p.m. L., REGULAR SESSION • CALL TO ORDER AND PLEDGE OF ALLEGIANCE Mayor Schlum called the meeting to order at 6:32 p.m. • INVOCATION—Pastor Paul Soderquist,Fountain Hills Presbyterian Church • ROLL CALL— Present for roll call were the following members of the Fountain Hills Town Council: Mayor Schlum, Councilmember Contino, Vice Mayor Leger, Councilmember McMahan, Councilmember Hansen, Councilmember Archambault and Councilmember Dickey. Town Attorney Andrew McGuire,Town Manager Rick Davis and Town Clerk Bev Bender were also present. • MAYOR'S REPORT (i) Mayor Schlum wished his wife a happy 21-year anniversary. • SCHEDULED PUBLIC APPEARANCES/PRESENTATIONS • (i) The Fountain Hills' youth will present an update on current activities and accomplishments. Town Recreation Coordinator Kathy Worrell addressed the Council and said it was her honor to be a part of the youth's update and show the Council just how remarkable they were and what they had accomplished in just one semester. Low z:\council packets\2009\r1-15-09\12-18-08 minutes.docx Page 5 of 22 Mayor Schlum announced that there were youths from the Mayor's Youth Council, the National Honor Society, the Research Club of Fountain Hills High School, the Family Career & Community Leader's Club,the Boys &Girls Club and the Fountain Hills High School Athletics Club present in the audience. (,.4) Representatives of all of the youth organizations addressed the Council and highlighted a PowerPoint presentation that explained their various programs and exceptional contributions to the community. (A complete copy of the presentation on file in the office of the Town Clerk.) Mayor Schlum and members of the Council acknowledged the tremendous efforts expended by the members of the various organizations and thanked all of the youths for their valuable contributions. (ii) Quarterly financial presentation by Finance Director Julie Ghetti Finance Director Julie Ghetti addressed the members of the Council relative to this agenda item and thanked them for the opportunity to present an economic update for the Town of Fountain Hills. Ms. Ghetti stated that there had been a lot of anxiety among the public regarding the Town's declining revenues and budget shortfalls in most cities and towns as well as the State. She said that Fountain Hills was not immune to the downturn; however, the economic impact was not as severe for the Town as it had been for other government entities. She noted that the Town anticipated a decline in revenues and budgeted accordingly last year. She added that although they were prepared, they did not anticipate the length and breadth of the recession. She stated that as they move forward, they would continue to be cautious about the economy until there were clear indications that the economy was reversing. Staff had already begun the process for the Fiscal Year 2010 budget with an expectation that there would be even less revenues next year. Ms. Ghetti highlighted a brief PowerPoint presentation for the benefit of the Council and viewing audience (a complete copy available for review in the office of the Town Clerk). She referred to a chart that depicted General Fund revenues for Fiscal Year 2009 and noted that the "biggest piece of the pie" was State Shared Revenues at 44% (includes State sales tax, State income tax and a vehicle license tax). She added that the Nue next biggest part was local sales tax at 42% (retail sales activities, telecommunications, restaurants/bars but not construction). She said that another piece was the building permits at 4% and the final category, "Other" at 10% (charges for services, interest earnings, miscellaneous revenues, rental revenues, etc.) for a total of$15.5 million. Ms. Ghetti referred to a chart that showed a history of General Fund Expenditures (Fiscal Year 2007 through Fiscal Year 2010, estimated) and noted that next year there was an estimated decrease of approximately $600,000 from the current year. She advised that on September 30th, staff put out a quarterly report on the Town's General Fund Revenue and reported that as of September 2007, they had actual revenues of$3.9 million, which was 91% of the quarterly budget. She noted that in September 2008, actual revenues were at$3.6 million, which represented 90% of the quarterly budget. Ms. Ghetti reported that one month later, for the four months ending October 31st, revenues dropped approximately 2% from the prior year, down from 93% to 91%. She said that the 2% drop indicated that revenues could be less than what was projected for this year. She advised that first quarter expenditures were 95% of the first quarter budget compared to 84% last year and explained that they were higher last year because a lot of the maintenance projects were done at the beginning of the year. She added that after four months, the percent of the budget used dropped from 95% to 93%, reflecting a "pulling back" of expenditures to match the revenues. She said that they were still below budget but slightly ahead because they had pulled back. Ms. Ghetti discussed the current year revenue projection for the General Fund and said that for State Shared Revenues they budgeted $7 million and staff's revised estimate was $6.8 million (a $200,000 reduction). She stated that building activity had decreased dramatically and staff originally estimated fifty-five new residential permits for the year but as of October 31st, the Town had issued only five permits. She said that z:\council packets\2009\rl-15-09\12-18-08 minutes.docx Page 6 of 22 if this pace of activity continues the actual revenue received could be less than the revised projection (approximately $200,000). She advised that Fountain Hills' sales tax was right where staff had projected it to be ($6.5 million) and in the "Other" category, staff was projecting another reduction of approximately $200,000 and the biggest portion of this category was in the interest earnings. Ms. Ghetti referred to charts that depicted the declining residential permit activity, retail sales tax collections, construction sales tax collections and General Fund revised projections for Fiscal Year 2009. She reported that total budget savings to date was approximately $411,000 and they had been realized as a result of unfilled positions and attrition. She added that the Town had also realized some unanticipated expenses totaling approximately $(147,000), which included contributing $75,000 to the State's General Fund, for a net savings year to date of $263,752. She informed the Council that $336,248 worth of additional cuts would be identified. Ms. Ghetti discussed staff's budget reduction decision methodology which included non-essentials or S.T.U.P.I.D. things (Silly things, Time consuming things (return on time expended was very low), Useless (results in little or no contribution to the quality of citizens' lives),Problematic, creates unnecessary barriers for citizens/staff, Ineffective (did not accomplish goal) and was Darn expensive. She added that the next layer was projects that could be delayed, one-time expenditures. What were new innovative ideas that could make the Town more efficient? She said that the last option that they looked at was salary, benefits and COLA reductions. She stated that in the first two categories personnel was not excluded from either the non-essentials or the S.T.U.P.I.D. items or the things that could be delayed. Staff had been looking at personnel and areas where they were not necessary and made adjustments. She said that the salary/benefits and the last decision would be a cut in essential services would lower the Town's level of service. She emphasized that the goal was to maintain the current level of service for citizens but also look for ways to be efficient. car Ms. Ghetti displayed a chart of the authorized positions since Fiscal Year 2003 to the current Fiscal Year and noted that in the Fiscal Year 2008-09 budget, they had 87.75 positions authorized and currently they only had 81.75 positions that were filled. Some of the increase from Fiscal Year 2004 to 2009 resulted from including the seniors and they had added the position of Environmental Planner and the Park Ranger for the new State Trust Land. Currently, they had not filled six positions and did not plan to do so. Ms. Ghetti reported that an important statistic that was a component of the Hocking Report was how the Town compares with other cities and towns in the number of employees per capita. She noted that compared to seven cities in Arizona, the Town had fewer employees per capita than the comparison group, including Public Safety. She stated that this was an indicator of productivity as the number of employees per capita should increase with the increase in service level. Fountain Hills had remained level since 2003, which indicates that the employees were being productive. Ms. Ghetti discussed the streets or HURF fund and pointed out that HURF revenues were restricted for street maintenance purposes only and were derived from gas revenue sales. She said that as the price of gasoline increases, consumers buy less gas, which resulted in less HURF revenues for cities and towns. She stated that staff was anticipating a shortfall of approximately $100,000 this Fiscal Year. Staff had already identified line items that would be reduced as revenues were reduced. Ms. Ghetti further stated that Special Revenue Funds were dedicated for specific uses and were generally capital with the exception of the Downtown Fund. The revenue for the Downtown Fund came from the 1.1% local sales tax, which was on target for this year. She added, however, that development fees and capital improvement funding were dependent upon building permit activity; and therefore, staff anticipated less revenue for those two funds. The Capital Projects Fund had accumulated a balance of approximately $10 million so no projects were at risk of being cancelled. However, future additions to the fund were uncertain for at least the next year; and therefore, projects next year must be prioritized and some might have to be postponed. z:\council packets\2009\r1-15-09\12-18-08 minutes.docx Page 7 of 22 Ms. Ghetti commented on the Town's economic outlook and said that the construction economy continues to be weak; new single-family building permits had ground to a halt. She added that the State income tax would be $500,000 less next Fiscal Year and the State budget deficit might affect State Shared Revenues. ( She said that the development of the Ellman property would likely be extended beyond 2010. Ms. Ghetti said that as far as Fiscal Year 2009-10 outlook, the Town should "proceed with caution" in preparing the Fiscal Year 2010 budget; programs and projects would have to be prioritized; the Town must prepare for the annual threat of the Legislature cutting State Shared Revenues; and CIP funding was depending on surplus revenues (likely to be zero) and construction sales tax — projects would need to be prioritized and some might have to be delayed. She discussed staff's projection for next Fiscal Year and said that they had budgeted$16.1 million in revenues this year and it looked like they were going to come in at $15.6, which was a $500,000 reduction. She added that next year staff was being even more pessimistic and estimated it would be about $14.9 million. They also anticipate that the HURF revenues would be down as well. Ms. Ghetti discussed long-term projections and said that in looking forward they could see that the economic picture should temporarily improve with the development of the Ellman Property but even so, the gap between revenues and expenditures began to widen again in Fiscal Year 2013 as expenditures begin to outpace revenues. She said that the chart also assumed that the Ellman Property would begin development in Fiscal Year 2011. Ms. Ghetti stated that in summary the economic slowdown gave the Town the opportunity to re-engineer themselves for more efficiency and better service. They needed to continue reducing operating costs while minimizing the effect on the citizens. Going forward, expenses would be monitored to ensure that there were sufficient current year revenues before authorizing expenditures. Ms. Ghetti thanked the Council for the opportunity to address them and indicated her willingness to respond to any questions. Mayor Schlum expressed appreciation to Ms. Ghetti and her staff for the presentation and their attention to detail. He added that because there was concern, it was good to bring all of the information forward for discussion. Councilmember McMahan thanked Ms. Ghetti for the comprehensive report and said that he was very impressed with it. Vice Mayor Leger asked where the Town was at as far as the State's litigation with respect to the Legislature requiring cities/towns to contribute funds and Ms. Ghetti replied that the League of Arizona Cities & Towns had taken the position that the cities and towns should not pay the State's General Fund. However, the Governor disagreed with that and the issue was currently tied up in the Courts and staff would just wait and see what the end result would be. She added that the consensus of the League was that it was not likely the cities and towns would have to pay it but it was prudent to include it in the Town's budget projections and account for it. She said that if they did not have to pay it that would be $75,000 that the Town would not have to spend. Mayor Schlum noted that the Town had reduced its budget by 10% at the first meeting of the new Town Council in July ($3 million in capital). He said that they were continuing to monitor revenues and expenditures and were actively seeking organizational efficiencies. He stated that they were asking Department Directors for further budget cuts this Fiscal Year and they were updating the Town's 5-Year C1P budget to prioritize projects for the most urgent. He noted that this Fiscal Year they had already pushed a number of projects back. z:\council packets\2009\r1-15-09\12-18-08 minutes.docx Page 8 of 22 The Mayor said that in talking with MAG, other Councilmembers and Mayors, and reading stories in the paper, there were some dramatic cuts being made that were infringing on the quality of life in those Le, communities. He noted that other communities had large retailers such as car dealers, super malls, etc. that were very sensitive to the economy. He reported that in the City of Phoenix if their law enforcement and fire services remained at a constant level they would need to make a 30% cut, which affected quality of life issues. The Mayor said that Fountain Hills was very different from those communities and that staff, management and the Council were always on top of the Town's funding and were conservative in their budgeting. He stated that they made necessary cuts before they become painful and added that the Town's retail business was largely items of household necessities and people were still spending money on those types of items. He noted that the Town's cost for public safety was a smaller portion of the General Fund than most cities (through their contracts). Mayor Schlum reported that staff initiated savings this Fiscal Year in the amount of $263,000 and operations saved approximately$148,000 for a total savings of$411,500. He reiterated that the Council and staff should be commended and said that the Strategic Planning Advisory Commission and the Hocking Report clearly helped the Town. He thanked the many talented volunteers who had worked hard to help the Town plan for the future while addressing current needs. He said that they had "their eye on the ball" and there might be tough decisions that had to be made but they would make sure that all options were explored and would mitigate any quality of life issues on the community. • CALL TO THE PUBLIC In response to a question from the Mayor, Town Clerk Bev Bender advised that two citizens wished to address the Council relative to this agenda item. Allen Hunt, 14648 N. Fountain Hills Boulevard, addressed the Council and said that he was currently serving as one of the facilitators of the Fountain Hills Men's Discussion Group that meets every Monday from 9:00 a.m. until 10:30 a.m. He reported that they had 42 active members and said that they discuss Town issues as well as individual items that people want to discuss. They also had guest speakers address them. He advised that they were currently concerned about the budget, the change in some job titles, possible hirings and the economic development freezes. He added that traffic lights were possibly going in where the members think 3-way stop signs would work just as well. He stated that during the Administrative Session someone talked about "a train wreck coming" and agreed that they had to be very cautious when programming how monies would be spent. He advised that other members of the group would come forward at future meetings to address different issues. Jerry Kirkendoll, 11405 Cameron Court, addressed the Council and brought up the issue of A-frame signs. He said that if a building was 20 feet back, they could not put up a sign out there so the business that did not need a sign could have one but the businesses that really needed the sign could not. He stated that the regulations make no sense and he would prefer not to allow anyone to have the signs. He added that he did not like the fact that signs had to be taken down if someone complained and they never knew who complained. He said that his address was Avenue of the Fountains even though his building was set back. He advised that he had been at that location for over 25 years and believed that he should be grandfathered in. Mayor Schlum thanked both speakers for their comments and told Mr. Kirkendoll that the Council specifically discussed his building and staff was instructed to look into finding a way for unique situations such as his. Councilmember Archambault declared a Point of Privilege and read the following into the record: Lie, It came to my attention this past week that a Council Member has promoted eliminating some upcoming expenditures. That we should be saving all the money we could for the coming financial doom. This type z:\council packets\2009\r1-15-09\12-18-08 minutes.doc Page 9 of 22 of behavior has caused staff to rethink the expenditure on the staff holiday celebration. Not only were various expenditures necessary to maintain the quality of life we all enjoy, the holiday celebration is used to bring joy and happiness throughout the community and reinforces high moral in staff. This Council Member has commented, in public, that we should forgo these expenditures to save money because the sky is falling. It disturbs me that whole truths were not shared with our citizens. Comprehensive facts were intentionally left out. This breeds distrust and division. It becomes a cancer that grows so large the original issues were lost in the growing anger of the crowd. It encourages Fatalism. Permit me at this point of privilege mayor to explain why we budget for a celebration recognizing the fine staff we demand so much from. 1) It takes a special person who wants to work for less pay than the private sector enjoys. They are the ones who have a greater goal than money can buy. They wish to serve the public! For this service they endure ridiculed by some mislead individuals. They get thrown into the mistrust that is engulfing the country as we see our world falling down around us on the evening news. 2) These talented individuals work many times harder than some members of this council care to admit. They sometimes do the jobs of 2 people when compared to the private world. I wish that I had 10 workers like Raymond Rees, Art Candelaria and Bill Haughey (HO-E). These gentlemen are always on the job even after hours. 3) And talking about after hours, how many of you in the audience work for your employers after hours without compensation? I have seen the likes of Tom Ward, Nancy Blumenstein, Samantha Coffman, Peter Johnson, Bob Rogers, Kate Zanon, Bev Bender, Don Clark, Mark Mayer, Joan McIntosh, Susan Tricki, Kelly Fonville, Shaunna Williams and many more here on a Saturday or late at night all because they wanted to get a task finished. They take pride in their work. More than I can say about some councilmembers. Nogg 4) Talking about pride: Ted Armbruster, Robyn Bechler, Pat Dunn, Dawn Hernandez and Nan Norton keep our courts in tip top shape while respecting the citizens that happen to grace the court chambers. They work with everyone so as to encourage socially acceptable behavior and leave them with their self respect. 5) Julie Ghetti and Mary Martin keep this town on a good financial footing. In fact, we have won the prestigious `Certificate of Achievement for Excellence in Financial Report" an astonishing 11 years in a row. Despite what some Council Members are preaching to the public "the sky is not falling here in Fountain Hills." We are the envy of the valley and our rainbow shines bright because of these two people. 6) Lastly, let us know forget the likes of Ken Kurth, Randy Herrel, Rodney Miskawitz, George Waligora, Greg Elco, Danny Tancredi (tan-cree-dee), Chance Butterfield, Lan Bratcher, Janice Baxter, Marilyn Grudier, Randy Roberts, Scott LaGreca, Captain Klienheinz and the likes. These are dedicated workers who work behind the scene and make our life tolerable. I can't imagine what this town would be like without their presence. How dreary a world it would be without the dedication of special people in every municipality. The external life with which municipal employees fills the world should never be extinguished. Staff; you unconditionally support your inexperienced elected official. You bring professionalism and encouragement to our elected world. In short, all of you, the ones who work for little pay with true hearts, make us look good. In doing so, you make great ideas better and great events happen. You serve the best interests of the community by providing for its safety and well being while respecting its small town character and quality of life. I will be forever grateful to all of you. z:\council packets\2009\r1-15-09\12-18-08 minutes.doc Page 10 of 22 • So with all of that said, I apologize to those whose names I do not have the time to mention, I wish not to try the Council's patience any farther. I would like to offer up a personal proposal. Not only should the budgeted celebration for our employees take place, I wish to entrust this $2000.00 check to the Town Manager. Rick you are to add this $2000.00 to the amount already budgeted and make their holiday party that much grander. The spirit by which this town was created is not dead, it is very much alive and it lives right here in everyone who believes. CONSENT AGENDA AGENDA ITEM #1 — CONSIDERATION OF APPROVING THE TOWN COUNCIL MEETING MINUTES FROM DECEMBER 4 AND 9,2008. AGENDA ITEM #2 — CONSIDERATION OF A TEMOPRARY USE PERMIT FOR THE PLAZA FOUNTAINSIDE OUTDOOR RETAIL SALES FOR REPEATING EVENTS FOR 2009(TU2008-11). Councilmember McMahan MOVED to approve the Consent Agenda and Councilmember Archambault SECONDED the motion. A roll call vote was taken with the following results: Councilmember Contino Aye Councilmember Hansen Aye Vice Mayor Leger Aye Councilmember Dickey Aye Mayor Schlum Aye Councilmember McMahan Aye Councilmember Archambault Aye The motion CARRIED UNANIMOUSLY(7-0). REGULAR AGENDA Mayor Schlum commented on the fact that the Town was fortunate to have an exceptional pool of citizens who volunteer to serve on the Town's Boards and Commissions. He congratulated the citizens selected this evening to serve and encouraged other volunteers to submit their names and continue efforts to serve the community. AGENDA ITEM #3 — CONSIDERATION OF APPOINTING CITIZEN(S) TO THE PARKS AND RECREATION COMMISSION WITH EACH SERVING A TWO YEAR TERM BEGINNING JANUARY 1,2009 AND ENDING DECEMBER 31,2010. Mayor Schlum MOVED to appoint Paul Kolwaite and Sharon Dennis to the Parks and Recreation Commission with each serving a two year term beginning January 1, 2009, and ending December 31, 2010, and Vice Mayor Leger SECONDED the motion,which CARRIED UNANIMOUSLY(7-0). AGENDA ITEM #4 — CONSIDERATION OF APPOINTING CITIZEN(S) TO THE MCDOWELL MOUNTAIN PRESERVATION COMMISSION WITH EACH SERVING A TWO YEAR TERM BEGINNING JANUARY 1,2009 AND ENDING DECEMBER 31,2010. Mayor Schlum MOVED to appoint Lena Belliner, Curt Cornum and Tom Barberic to the McDowell Mountain Preservation Commission with each serving a two year term beginning January 1, 2009, and ending December 31, 2010, and Councilmember McMahan SECONDED the motion, which CARRIED UNANIMOUSLY(7-0). L z:\council packets\2009\r1-15-09\12-18-08 minutes.docx Page 11 of 22 AGENDA ITEM #5 — CONSIDERATION OF APPOINTING FOUR CITIZEN(S) TO THE COMMUNITY CENTER ADVISORY COMMISSION WITH EACH SERVING A TWO YEAR TERM BEGINNING JANUARY 1,2009 AND ENDING DECEMBER 31,2010. Mayor Schlum MOVED to appoint Jerry Gorrell, Leonna Johnston, Alice Brovan and Sharon Morgan to the Community Center Advisory Commission with each serving a two year term beginning January 1, 2009, and ending December 31, 2010, and Vice Mayor Leger SECONDED the motion, which CARRIED UNANIMOUSLY(7-0). AGENDA ITEM #6 — CONSIDERATION OF APPOINTING THREE CITIZEN(S) TO THE SENIOR SERVICES ADVISORY COMMISSION WITH EACH SERVING A TWO YEAR TERM BEGINNING JANUARY 1,2009 AND ENDING DECEMBER 31,2010. Mayor Schlum MOVED to appoint Jim Judge, Nancy McNamara and Howard Gherman to the Senior Services Advisory Commission with each serving a two year term beginning January 1, 2009, and ending December 31, 2010, and Councilmember Archambault SECONDED the motion, which CARRIED UNANIMOUSLY(7-0). AGENDA ITEM #7 - CONSIDERATION OF APPOINTING TWO CITIZEN(S) TO THE PUBIC SAFETY ADVISORY COMMISSION WITH EACH SERVING A TWO YEAR TERM BEGINNING JANUARY 1,2009 AND ENDING DECEMBER 31,2010. Mayor Schlum MOVED to appoint Larry Moyse and George Aliory to the Public Safety Advisory Commission with each serving a two year term beginning January 1, 2009, and ending December 31, 2010, and Councilmember McMahan SECONDED the motion,which CARRIED UNANIMOUSLY(7-0). AGENDA ITEM #8 — CONSIDERATION OF THE PURCHASE AGREEMENT WITH FIVE STAR FORD FOR A 2009 F-150 FORD TRUCK, IN THE AMOUNT OF $43,003.88, FOR USE BY THE 4) ASSISTANT FIRE CHIEF. Assistant Fire Chief Randy Robert addressed the Council relative to this agenda item and said that under the vehicle replacement policy established by the Town, staff was proposing that the Town replace the existing Fire Department Utility Truck (a 1997 Ford F150) that was currently stationed at Station #2. He stated that the new vehicle would be used as the new Assistant Chief's vehicle and would play a multi-role. He explained that they wanted to get the "most bang for the buck" out of this vehicle and said that he believed a lot of opportunities existed for that. First and foremost, they had the emergency response roll and a supervisor or command officer needs to be on the scene quickly at major incidents so the vehicle would fulfill that role and it would also provide increased possibilities for mountain rescue incidents. He noted that the vehicle would also see daily use in Fire Prevention activities. Councilmember Archambault MOVED to approve the purchase agreement with Five Star Ford in the amount of $43,003.88 for a 2009 F-150 truck for use by the Assistant Fire Chief and Councilmember McMahan SECONDED the motion. In response to a question from Councilmember Archambault, Assistant Fire Chief Robert explained that there was a State contract price of$22,757 for the base price of the truck and when they added the necessary options to make it off-road worthy and able to have the separated seats to allow for a console, it brought the price to $28,482. He said that when they add their Code 3 lights, sirens, radio console and other equipment as well as taxes, etc., it brought the total price to $43,003.88. He noted that the cost was just about half of that spent by other municipalities. Ms. Ghetti commented that the Town had a dedicated fund for the vehicle replacement program and it was fully funded ($228,000 at the current time). She noted that this vehicle was included in the budget and was the only „,„iii) z:\council packets\2009\r1-15-09\12-18-08 minutes.docx Page 12 of 22 • vehicle that would be replaced this year. She stated that the vehicle being replaced was originally purchased for the Marshal's Department as an animal control vehicle. Councilmember McMahan asked whether this item went out for a competitive bid and the Assistant Fire Chief replied that this was purchased on the State contract, which precluded the Town from having to go out to bid and added that there was a very thin margin on State contract items. Town Attorney Andrew McGuire commented that State contracts were all competitive bidding processes; it was just that the State had done the competitive bidding at the beginning of the year to secure contracts for this Fiscal Year that other cities and towns could buy into. Alan Hunt addressed the Council and said that his question had to do with why the Town had to pay so much money for a pickup but he believed that it had now been answered. He stated that his only remaining question was how many miles were put on the 1997 pickup and Mayor Schlum advised that the truck had 84,000 miles on it. The motion CARRIED UNANIMOUSLY(7-0). AGENDA ITEM #9 — CONSIDERATION OF RESOLUTION 2008-44, A PROPOSED AMENDMENT TO THE EXISTING OCTOBER 2,2008 DEVELOPMENT AGREEMENT BETWEEN THE TOWN OF FOUNTAIN HILLS AND FOUNTAIN HILLS TOWN SQUARE, LLC FOR THE FOUNTAIN HILLS TOWN SQUARE—PHASE 1. (CASE#DA20087-02). Mayor Schlum advised that there would be one staff presentation for Agenda Items 9 and 10. Councilmember Hansen declared a potential conflict of interest regarding Agenda Items 9 and 10 and said that she would refrain from any discussion/consideration of these items. Councilmember Hansen left the dais at 7:38 p.m. Senior Planner Bob Rodgers addressed the Council relative to these agenda items and explained that this was an application for a concept plan and amended development agreement for the Fountain Hills Town Square project. (A complete copy of the presentation was available in the office of the Town Clerk.) He said that the concept plan would not typically be reviewed by the Council at this time; however, this one was a requirement of the development agreement so the Council got to look at it. He stated that tonight's proposal was for Phase 1 of a mixed-use project containing a theatre, retail shops, restaurants, offices and multi-family uses. The project was located at 16725 E. Avenue of the Fountains and Phase 1 was located on the southwest corner of the Avenue of the Fountains and Verde River Drive. Mr. Rodgers referred to slides depicting the phased plan of the entire development as well as sketched plans of the overall project. He said that Phase 1 consisted of three buildings — B, C, and what he would call QMN. Building B was three stories high with 44,124 square feet with 14,708 square feet of retail space on the ground floor and 29,416 square feet of office space on the second and third floors. Building C was a 40,520 square foot building containing 2,800 square feet of restaurant space and 11,190 square feet of retail space on the ground floor and 26,530 square feet of office space on the second and third floors. Both Building B and C were 42-feet high three-story buildings with retail on the ground floor and/or restaurants with office uses on the second and third floors. He explained that because the buildings exceed the 40-foot height requirement in the TCC Zoning District, specific approval by the Town Council was required. Mr. Rodgers informed the Council that Building Q was the largest portion of what he calls QMN and was 60,983 square feet in size and was a 12-screen movie theatre. It was currently proposed to be 45-feet tall and Ly would also require specific approval by the Town Council. Building M was a 4,378 square-foot building containing 2,700 square feet of restaurant space and 1,678 square feet of retail space. This building was proposed to be a single-story structure and was actually attached to the east side of Building Q and the proposed z:\council packets\2009\r1-15-09\12-18-08 minutes.docx Page 13 of 22 used was a potential martini bar. Building N had 5,200 square feet of retail space. The building was proposed to be a single-story structure and was actually attached to the north side of Building Q. This building was being proposed as a potential ice cream shop. Mr. Rodgers said that other items to note on this plan include the fact that there were a total of 401 new on-site parking spaces being proposed (47 additional spaces along the Avenue of the Fountains and Verde River Drive frontages were also being counted). Under the terms of the development agreement, an additional 347 existing spaces located on the Town Hall property and the Avenue of the Fountains would also be available for a total of 795 spaces in Phase 1. Mr. Rodgers referred to the various loading areas and the connections/access areas (landscaped walkway, meandering sidewalk and extensive landscaping). He noted that the walk was designed to create linkages to the Library/Community Center, the art walk on the developer's property and then ultimately down to Fountain Park. Mr. Rodgers further stated that the applicant proposed to continue the themed streetscape along the Avenue of the Fountains. Also being proposed was a grand entry area in front of the theatre in the Verde River Drive right- of-way and noted that encroachment permits would be required for this work. Discussion ensued relative to the various building elevations and the proposed contemporary southwest design; materials; various components of the proposal and the fact that the difference between the current development agreement and the proposal was the elimination of all residential uses in Phase 1 and a net increase of 28,779 square feet of commercial building space. Mr. Rodgers stated the Planning and Zoning Commission voted to recommend approval of the concept plan as presented and forwarded on a recommendation to approve the concept plan including the increased building heights and loading space waivers subject to the stipulations outlined in the staff report. He reported that subsequent to that meeting, staff had met with the development team to discuss some concerns regarding drainage and as a result of that discussion; staff recommended Item #4 in the Town Engineer's memo of November 19,2008. The recommendation would be to delete the phrase "through your site" (the second line in NINO that paragraph). He explained that the simple change allowed them more options in designing the change in the drainage improvements and did not allow them to go across the site; they could go around it and work with the Town perhaps using the right-of-way. Mr. Rodgers said that staff recommended that the Council approve the Concept Plan, including the increased building heights and loading space waivers subject to the stipulations in the staff report, including the amendment to Item#4 in the Town Engineer's November 19, 2008 memo. Staff also recommended amending the Development Agreement as presented. Mr. Rodgers indicated his willingness to respond to questions. Mayor Schlum thanked Mr. Rodgers for his presentation. He requested a motion on Agenda Item#9. Vice Mayor Leger MOVED to approve Resolution 2008-44, an amendment to the existing October 2, 2008 Development Agreement between the Town of Fountain Hills and Fountain Hills Town Square, LLC for the Fountain Hills Town Square —Phase 1 as recommended by staff and Councilmember McMahan SECONDED the motion. Dave Fackler, 224 E. Brentrup Drive, Tempe, a member of the Development Team for Fountain Hills Town Square, LLC, addressed the Council and said that Mr. Rodgers had done an excellent job in presenting the plan. He stated that the members of the team agree with all of the stipulations contained in the staff report. He thanked staff for their outstanding efforts over the last 18 months and also expressed appreciation to the Mayor and members of the Council for their hard work in this regard. He added that they were approximately six months behind what they had originally hoped for and said that with economic times being what they were financing was extremely difficult and complicated. He stated that he would be happy to respond to any „vs) questions from the Council. z:\council packets\2009\r1-15-09\12-18-08 minutes.docx Page 14 of 22 Mayor Schlum thanked Mr. Fackler for his comments. iiiery Ms. Bender advised that there were no citizens wishing to speak on this item. Vice Mayor Leger said that he would like to pose a question relative to Agenda Item #9 and stated that throughout the process they had always talked about the sensitivity regarding height and they had a zoning ordinance that allowed up to 48 feet with Council approval. He added that they were looking at some buildings that were at 42 and 45 feet high and said that overall he believed they had done a fantastic job in working on the height. He stated that for clarification purposes, he would like to know if the 42 and 45-foot heights were from natural grade and Mr. Fackler confirmed that the heights were from natural grade. Mr. Fackler added that from slope the buildings ranged from 32 feet up to 42 feet. The portions that get up to 42 and 45 feet were the parapet of the theatre, the entry features on the theatre and the mechanical screening on all three buildings. In response to a question from the Mayor relative to the modification of #4, Mr. McGuire advised that that should be part of Agenda Item#10. The motion CARRIED UNANIMOUSLY(6-0) by those present. AGENDA ITEM#10— CONSIDERATION OF THE CONCEPT PLAN FOR THE "FOUNTAIN HILLS TOWN SQUARE—PHASE 1"DEVELOPMENT PROJECT CONSISTING OF 155,205 SQUARE FEET OF COMMERCIAL, RETAIL, OFFICE AND A 12-SCREEN THEATRE. ALSO INCLUDED ARE PARKING AREAS,EXTENSIVE LANDSCAPING AND VARIOUS PUBLIC IMPROVEMENTS. THE PROJECT IS LOCATED AT 16725 E.AVENUE OF THE FOUNTAINS. (CASE#CP2008-08). See Agenda Item#9 for discussion of this agenda item. Vice Mayor Leger MOVED to approve the proposed Concept Plan for the "Fountain Hills Town Square — Phase 1" development project, consisting of 155,205 square feet of commercial retail, office and including a 12- screen theatre, subject to the stipulations outlined in the staff report and specific approval of the increased building heights as shown on the plan and modification to Item#4 in the Town Engineer's memo of November 19, 2008, as discussed and Councilmember Dickey SECONDED the motion. Additional discussion ensued relative to slopes, site lines, elevations and building heights. Jerry Kirkendoll, 11405 Cameron Court, addressed the Council and said that his family went to Scottsdale almost every week to see a movie and then they eat and shop. He spoke in strong support of developing a theatre complex in Town to generate entertainment and sales tax revenues. In response to a question from Mayor Schlum relative to the motion on the floor, Mr. McGuire clarified that the motion and second included all of the stipulations in the staff report as amended by staff in the presentation. Mayor Schlum asked Vice Mayor Leger, the maker of the motion, if his intent was to include the modified Item #4 in the Town Engineer's memo of November 19, 2008, as outlined by staff and the Vice Mayor confirmed that that was his intent and understanding and Councilmember Dickey, who seconded the motion, also concurred. (Reflected in motion listed above.) The motion CARRIED UNANIMOUSLY by those present(6-0) Councilmember Hansen returned to the dais at 8:01 p.m. AGENDA ITEM #11 — CONSIDERATION OF RECLASSIFYING THE POSITION OF ASSISTANT TO THE TOWN MANAGER TO DEPUTY TOWN MANAGER AND HIRING A FULL TIME ECONOMIC DEVELOPMENT ADMINISTRATOR. z:\council packets\2009\r1-15-09\12-18-08 minutes.docx Page 15 of 22 Human Resources Director Joan McIntosh addressed the Council relative to this agenda item and said that as they were all aware, Assistant to the Town Manager Kate Zanon had resigned her position effective the middle of January. The position of Assistant to the Town Manager had been responsible for performing professional administrative duties and projects as assigned by the Town Manager as well as the duties associated with *4140 economic development. Over the past year, it had become apparent that the combination of these duties required to be right hand person of the Town Manager and those of economic development were more than one person could reasonable accomplish. Staff was recommending that the position of Assistant to the Town Manager be reclassified to Deputy Town Manager and believed that this title would better reflect the required responsibilities and places the position on equal ground with peers in other municipalities. Ms. McIntosh explained that instead of performing the duties associated with economic development, the Deputy Town Manager would: • Take on projects assigned by the Town Manager such as strategic planning • Contract oversight such as the tourism contract • Grants oversight • Town budget oversight • Oversight of the Public Safety Advisory Commission • Represent the Town Manager at meetings such as MAG • Act as Town Manager in the Manager's absence Ms. McIntosh added that the position could be filled with existing staff without adding an additional FTE or salary. In addition, staff was recommending the hiring of a full time Economic Development Administrator to meet the requests of the community. The duties of the Economic Development Administrator would include: • Recruit businesses that were needed and would be successful here • Help small business owners navigate the red tape of permits, signage,regulations,etc. • Fill existing buildings • Work with commercial neighborhoods that had specific needs • Build a sustainable financial future and support the businesses currently in Fountain Hills Ms. McIntosh said that staff believed that this position would yield a good return on their investment as they attract the businesses that residents desire. Ms. McIntosh highlighted a brief presentation on this item (a complete copy was on file in the office of the Town Clerk) and referred to a slide that showed the current administration organizational chart and another that showed the proposed administrative changes (the Town Manager with a Deputy Town Manager and that position would have Finance and Customer Service) and there would be an Office of the Town Manager that would report to the Town Manager (Economic Development, Public Information, Human Resources and the Town Clerk). She said that there were no proposed changes in other departments. She reiterated that the proposal maintained the current number of FTE decreased the amount of total salaries paid. Town Manager Rick Davis addressed the Council and said that the proposal was the result of discussions with staff and elected officials. He said that speaking directly to the position of Economic Development Administrator, they were uniquely aware of the aspects of Fountain Hill's economy, being a municipality that was almost entirely dependent upon economic exchange in order to support the services that were provided. He stated that economic development was their "life blood" or "sales force" as it would be called in the private sector and stressed the importance of strong emphasis in this critical area. He encouraged the Council to seriously consider this proposal and thanked them for their consideration and on-going support. Mayor Schlum thanked Ms. McIntosh and Mr. Davis for their comments. ,440) z:\council packets\2009\r 1-15-09\12-18-08 minutes.docx Page 16 of 22 Councilmember Dickey MOVED to approve the reclassification of Assistant to the Town Manager to Deputy Town Manager and the hiring of a full time Economic Development Administrator and Councilmember Archambault SECONDED the motion. Councilmember McMahan asked why these items were not broken down into two separate agenda items. Mr. Davis replied that it was a proposal to fill the vacancy caused by the resignation of one person. He said that the Council had the ability to make amendments to the proposal as deemed appropriate. He added that they really were addressing the vacancy of one employee. Mayor Schlum commented that it was an organizational change and since they were not a large organization, when a leadership position was changed, such as the Assistant to the Town Manager to Deputy Town Manager and Economic Development Administrator, there were many responsibilities involved. He said that Councilmember McMahan had raised a good question. Councilmember McMahan advised that his position was that he would like to hold off on the Economic Development Administrator position and not fill it until the end of the Fiscal Year. Councilmember Dickey asked whether the funding for the Economic Development Administrator could come in part from the Downtown sales tax and Ms. McIntosh replied that half of the salary was from the Downtown Development sales tax and the other half was out of the General Fund. Ms. McIntosh advised that Ms. Zanon's current salary was approximately $80,700 a year and they would not be adding anyone new for the Deputy Town Manager's position and they could fill that position from within. She added that that person would not receive a salary increase for assuming those duties. She said that when they hired an Economic Development Administrator, the top of that salary was approximately $70,000 (hiring salary), $10,000 to $11,000 less than what Ms. Zanon was currently making and that was where the savings came from. Councilmember Hansen asked whether staff had any data relative to how many businesses had been brought into Town as a result of such a position in the past. Mr. Davis stated that he was not aware of any statistics that would provide a definitive answer to the question. He added, however, that recruitment of businesses was just one aspect of the job and another was continuing to nurture existing business relationships, which was very much in keeping with the Town's goal of being business friendly. Councilmember Archambault advised that over the past year he had some conversations with Ms. Zanon and the Town Manager and early on when they first created the position the problem became that the person could not be an Assistant to the Town Manager and an Economic Development Specialist and do both jobs well — they were both time intensive. He said that a great need existed in the economic development area and the results would be extremely valuable to the Town. He added that the Deputy Town Manager's position was also an important one and spoke in support of proceeding as recommended. Councilmember Dickey said that they also had to remember that from November to July Ms. Zanon had served as the Town Manager so there would be difficulties associated with obtaining accurate data. Mayor Schlum said that in an economic downturn, such as the one they were currently in,they need the Town's businesses to succeed and they had to do everything they could as a community to help them succeed. He stated that Ms. Zanon did an excellent job in this area and he believed they needed to move forward in this critical area that would benefit everyone by hiring an Economic Development Administrator. He commended staff on their proposal. Councilmember McMahan said that he had discussed this position in great length with the Town Manager and he agreed that they needed a person who would work aggressively with current Town businesses and new z:\council packets\2009\r1-15-09\12-18-08 minutes.docx Page 17 of 22 businesses; a"go getter." He added that his only question was whether they could delay filling that position but since it might take some time to obtain such a person, he would withdraw his objection. l Bob Deppe, N. Boulder Drive, addressed the Council and stated that as far as the Economic Development Administrator's position he would question why they really need it now. He noted that during the time Ms. Zanon served as Town Manager the position was not filled and he asked how that damaged the Town and why would it damage it now. He said that if red tape was the issue, they should fix the red tape instead of hiring another person. He added that he would also question the need for a Deputy Town Manager's position now and asked if they would have to fill the position of whoever in Town Hall was selected to fill the Deputy's position. He stated that they should be laying off people rather than hiring. He also questioned the duties that would be left for the Town Manager to carry out. He discussed Ms. Ghetti's earlier financial presentation and said they should not spend money now when they might have to lay people off in the future. Mayor Schlum thanked Mr. Deppe for his comments. Councilmember Hansen said that her concern was that they might be setting up the same scenario for the next person who served as the right hand of the Town Manager and carried out significant other duties (too many responsibilities to be carried out by one person). Mr. Davis commented that they were looking to fill the Deputy position with someone who was currently in a position where he/she "dovetails" very well with administrative duties. He added that economic development differed greatly from what he did on a day-to-day basis although he did his best to support that effort. He noted that the person who would fill that position also had individuals who would be able to assist in the transition, whereas when Ms. Zanon went from an Assistant to the Town Manager to Interim Town Manager and did not have that kind of support. He expressed the opinion that they had the human resource infrastructure in place to support the transition. Vice Mayor Leger said that the previous economic development coordinator was pretty much on "tight reigns" and worked in Town for the most part conducting surveys and talking to businesses. He felt that the person did not really market the community or try to bring new businesses in and he believed that Ms. Zanon spent time with the various groups and businesses in the community. He asked if there were any statistics available relative to existing vacancies in Town. Mr. Davis stated that he would like to conduct additional research prior to providing actual numbers but he was aware of the fact that a large quantity of retail space/office vacancies exist in Town. He added that there was a tremendous opportunity right now to introduce businesses to Fountain Hills and educate them on the reasons why we believe they could be successful in Fountain Hills. He said they needed someone to continue in that direction and make things happen. In response to a question from the Vice Mayor, Mr. Davis confirmed that the Deputy Town Manager, in essence, would be carrying out the responsibilities of the Finance Director. He added that it was an oversight position and there was staff in place as well as an Executive Budget Committee to assist in the Finance area. Vice Mayor Leger noted that they were eliminating a position and restructuring the organization to be more efficient and effective at a lower cost. He said that he would support staff's proposal. Town Attorney Andrew McGuire commented that the motion must also include approval of the revised organizational chart. Councilmember Dickey MOVED to approve the reclassification of Assistant to the Town Manager to Deputy Town Manager and hiring a full time Economic Development Administrator in addition to approving the new organizational chart and Councilmember Archambault SECONDED the motion, which CARRIED UNANIMOUSLY(7-0). z:\council packets\2009\r1-15-09\12-18-08 minutes.docx Page 18 of 22 • AGENDA ITEM #12 — CONSIDERATION OF A STREET MAINTENANCE CONTRACT WITH SOUTHWEST SLURRY SEAL, INC. AND NESBITT CONTRACTING CO., INC. FOR A COMBINED Lie, PRICE NOT TO EXCEED$825,000. Public Works Director Tom Ward addressed the Council relative to this agenda item and commented on the fact that there had been a lot of rain lately and the streets were wet so the Council was probably asking why he was asking for street maintenance money now. He said that it was important to note that the contractors who performed this work had a lot of volume with other municipalities so Fountain Hills, a small municipality with a small expenditure, would need to get on their lists early. He added that even though they might not be performing the work until February,March or April,they needed to get the item approved at this time. Mr. Ward stated that one of the Town's goals was to maintain smooth streets in the community and that was staff's goal in bringing this forward. He said that the Council had seen his staff summary but due to the budget reductions heard tonight from Ms. Ghetti he was taking a different direction as far as street maintenance for this Fiscal Year. He added that this meant he would be making some changes on the spot. He noted that several factors had been considered, including asphalt and concrete prices and the fact that they were still high (asphalt on this contract was at $106 a ton and 18 months ago they paid about half that price). He expressed concern regarding this issue and said he had to consider whether they should wait on the asphalt work they were asking for tonight and whether oil would go up and the price might remain high. He added that they also could have contractors later on who could possibly need more work and so the bidding process might be a better climate at that time. He reported that micro surfacing and slurry seal was up 20% and that was the main product they put down in Zone 3. He said that this was not a huge increase when you considered what had happened with gas, concrete and asphalt prices. Mr. Ward noted that another item they were considering this evening was the fact that the Sanitary District had told them that they would be working in the Town Center/Downtown. He stated that that was a factor last year (they took longer to design the reclaimed and gravity lines) and he was being told that they would be working on Aliw Avenue of the Fountains,El Lago and La Montana shortly after the February fair was over. Depending upon the length of time that took to happen,they could miss the window for this Fiscal Year. Mr. Ward said that in previous years the Town utilized a Chandler contract with Southwest Slurry Seal, Inc. and realized a savings of approximately $70,000. This year, staff was proposing to "piggy-back" on the City of Scottsdale's contract for street maintenance. This contract contained slurry seal, micro-surfacing, mill and overlay and drainage repairs. Mr. Ward noted that a Pavement Management Study was conducted in 2007 and it told them that they were doing things the right way; they were headed in the right direction. He added that it also told them that there were certain streets based upon the ratings that they needed to look harder at, they needed more intense maintenance on those streets. He said that tonight he was going to discuss six streets within Zone 3 that required mill and overlay and this would cost well over $200,000. He stated that in looking at the prices and doing the calculations on the contract mill and overlay they were talking $14.80 a square yard, slurry seal was $1.78 a square yard and micro-surface was $2.38 a square yard so if he appeared somewhat apprehensive in moving forward to do asphalt work (yet wanting to follow the results of the Pavement Management Study) that was the reason. Mr. Ward referred to a slide that depicted a zone map (a copy of the entire presentation on file in the office of the Town Clerk), pointed to Zone 3 and discussed the proposed work that needed to be done. He said that staff had decreased the amount of mill and overlay work that they were proposing. He discussed the streets that staff was looking at for micro-surfacing (Town Center/Downtown area — Avenue of the Fountains, Parkview, La Montana, etc.) He said that he would present some options to the Council for their consideration: (1) Look at slurry sealing all of Zone 3, micro-surfacing in the Downtown area and mill and overlay in Zone 3 as well. He filow said when they did the calculations they were at $907,362, $82,000 over the budgeted amount of$825,000. He said that was not one of staff's recommendations; (2) Perform slurry seal work in all of Zone 3 and do the mill z:\council packets\2009\r1-15-09\12-18-08 minutes.docx Page 19 of 22 and overlay for a total of$778,151 (eliminating the micro-surfacing Downtown). He said it was important to remember that the Sanitary District would be there and he doubted that they would complete their work in time. That would leave additional HURF funds in the amount of$46,849; (3) Perform only slurry seal in Zone 3 for ( $553,654. That did not include milling and overlaying those six streets; they would wait and go against the Pavement Management Study. This would result in an additional HURF balance of$271,346. He discussed(4) and said that he included this option because this was something that the Town had done in the past. He referred to the map and said that if they look at where Shea Boulevard was they would not perform any street maintenance work below Shea; they would only perform the work above Shea. They would perform slurry seal on those streets and mill and overlay the streets as indicated on the map and they would not perform any micro- surfacing. He stated that this represented a total expenditure of $429,000 versus $825,000 that was budgeting for a savings in the HURF fund of$395,000. Mr.Ward said that the last option (5) was to do nothing. Mr. Ward noted that under option (4), the $395,000, needed to include $25,000 for striping because he left it out. The contract had striping in it so if they put the money in it was not as if they were doing something that was not within the contract. He said that if they added the $25,000 it totaled $454,381 for option (4) — street maintenance above Shea Boulevard. Mr. Ward advised that he would recommend that option. He indicated his willingness to respond to questions from the Council. Mayor Schlum thanked Mr.Ward for his presentation. Ms. Bender advised that there were no citizens wishing to speak on this item. In response to a request from Councilmember Archambault,Mr.Ward reviewed the five options listed above. Ms. Ghetti explained that there really was not $825,000 to transfer over from HURF to the Capital Projects Fund; staff believes it would be approximately$100,000 less ($725,000). Mr. Ward advised that if the HURF funds did come in less, staff could limit work. They were looking at a44) maximum "not to exceed" on this situation so they would have time to consider this further and perhaps "think out of the box"if deemed necessary. He noted that Zone 3 was the smallest one they had in Town. Councilmember Dickey commented that the $100,000 deficit was for this year and said next year there could be a larger deficit. She added that the options did not make reference to prices decreasing and said it would seem prudent to not have a large contract right now in case something like that did happen. In response to question from Councilmember Contino, Mr. Ward stated that as far as Option 1, the entire zone, his concern was that it created a deficit for the HURF fund. He noted that they could only lock in prices for one year at a time; they could not obtain two-year contracts because of the price volatility associated with the products. Mr. Ward explained that Scottsdale's contract was for one year and he believed it expires July 8th. He added that the Town would terminate its contract on June 30th so they could not get those prices beyond July 8th since that would be the deadline date. Councilmember Contino asked if some of the work was going to be a"quick fix"that would require the Town to go back and redo work in a few years. Mr. Ward replied that the Pavement Management Program indicated that eventually they would have to move forward and do something else. He added, however, that they had been using the same products since before incorporation and he would not call it a"quick fix." Discussion ensued relative to concerns regarding prices; the fact that neither Shea Boulevard or Saguaro Boulevard would be touched at this time; the fact that that intersection project had been submitted for the Stimulus Package; the fact that Mr. Ward believed now was the right time to do the slurry seal and his only z:\council packets\2009\r1-15-09\12-18-08 minutes.docx Page 20 of 22 concerns had to do with the mill and overlay; carrying over HURF funds to future years because of the economy and the work that the Sanitary District would be conducting. Mayor Schlum stated that it made sense to him to proceed with the slurry seal and wait on the mill and overlay until the timing was better. Councilmember Archambault proposed a sixth option—where they do everything(slurry seal) north of Shea and commercial area south of Shea but as they had funds available they start identifying work that was more important and more visual. He said that hopefully next year they could do more of that. Mr.Ward clarified that all of the slurry seal would include south of Shea as well. Councilmember Dickey MOVED to approve a one-year contract with Southwest Slurry Seal, Inc. and Nesbitt Contracting Co., Inc. for street maintenance not to exceed $578,654 and Councilmember McMahan SECONDED the motion (Option 3), which CARRIED UNANIMOUSLY(7-0). AGENDA ITEM #13 - CONSIDERATION OF RESOLUTION 2008-45, REGARDING AN INTERGOVERNMENTAL AGREEMENT WITH THE CITY OF MESA IN ITS CAPACITY AS ADMINISTRATIVE MANAGER FOR TOPAZ REGIONAL WIRELESS COOPERATIVE, RELATING TO COMMUNICATIONS AND OPERATIONS. Town Manager Rick Davis informed the Council that staff had been engaged in a study evaluating the direction the Town should go in as far as long-term fire protection for the Town. He said that options had been narrowed down by the Committee including (1) renewing the contract with Rural Metro or (2) internalizing those resources and establishing a municipal fire department. He stated that key to making a decision was knowing what capital expenditures were going to be needed in preparation for that transition. He added that in either case they needed to know what their communication capabilities were relative to radio and dispatch. He noted%row the only way to evaluate this was through a study, which staff was proposing be conducted by Motorola. Motorola already assisted a consortium or a group of dispatch users in the east valley known as TOPAZ. He advised that the lead agency was the City of Mesa and about a week and a half ago, the TOPAZ board completed a study of the Fountain Hills area, contingent upon the Council's approval, of an agreement with that group with Mesa as the lead agency in the study. It was proposed that they conduct the study that would give them information relative to what communications infrastructure they were missing now, determine the status of their communications capabilities and would give the Town a blueprint and plan for the future to address any deficiencies that were noted by the study. Mr. Davis urged the Council to approve the agreement so that they could move forward as quickly as possible. He added that there would be a discussion of options relative to fire protection on January 13, 2009. Councilmember McMahan MOVED to approve Resolution 2008-45 and Councilmember Archambault SECONDED the motion. There were no citizens wishing to speak on this item. The motion CARRIED UNANIMOUSLY (7-0). AGENDA ITEM #14 — COUNCIL DISCUSSION/DIRECTION TO THE TOWN MANAGER. ITEMS LISTED BELOW ARE RELATED ONLY TO THE PROPRIETY OF (i) PLACING SUCH ITEMS ON A FUTURE AGENDA FOR ACTION OR (ii) DIRECTING STAFF TO CONDUCT FURTHER RESEARCH AND REPORT BACK TO THE COUNCIL. A. None. z:\council packets\2009\r1-15-09\12-18-08 minutes.docx Page 21 of 22 AGENDA ITEM #15 — SUMMARY OF COUNCIL REQUESTS AND REPORT ON RECENT ACTIVITIES BY THE TOWN MANAGER. Mr. Davis urged the Council to note on their calendars that they would be getting together on the 7th of January for an Open House regarding the budget that would be held at the Community Center from 6:00 p.m. until 8:00 p.m. He added that on January 9th he looked forward to spending some time with the Council as they continue their quest towards some Council goals for the upcoming calendar year (all day at the Community Center). He wished the members of the Council a very merry Christmas and thanked them for the privilege of serving them and the Town of Fountain Hills over the past six months. AGENDA ITEM#16—ADJOURNMENT. Councilmember McMahan MOVED to adjourn and Vice Mayor Leger SECONDED the motion. The Regular Session adjourned at 9:10 p.m. TOWN OF FOUNTAIN HILLS By: iiir• r ay °Schlum ATTEST AND PR PARED BY: Bevelyn J. e er,Town Clerk CERTIFICATION I hereby certify that the foregoing minutes are a true and correct copy of the minutes of the Administrative and Regular Sessions held by the Town Council of Fountain Hills in Town Hall on the 18th day of December, 2008. I further certify that the meeting was duly called and that a quorum was present. DATED this 15th day of January 2009. Bevelyn J. B d ,Town Clerk z:\council packets\2009\r1-15-09\12-18-08 minutes.docx Page 22 of 22